Asia Business

Keidanren keeps up the pressure on Japanese government

Nippon Keidanren, also known as the Japan Business Federation, is one of the most powerful voices in the country's business community.

With more than 1600 members, including some of Japan's biggest companies, its opinions are watched carefully.

It is currently headed by Hiromasa Yonekura, who is also the chairman of Sumitomo Chemical Company. Its previous heads include the bosses of Toyota Motors and Canon.

Hence, when it criticises the government's response to the earthquake and tsunami, alarm bells are likely to ring.

Since the 11 March earthquake and tsunami, the federation has been highly vocal about how the government should handle the crisis.

Keidanren says the government was slow to react to the devastation caused by the earthquake and tsunami that hit Japan's north-east coast on 11 March.

"The government's initial reaction was rather slow. We moved before them," said Hiromasa Yonekura the chairman of Keidanren

The foundation also said that while the radiation crisis at the Fukushima Daiaichi nuclear plant has grabbed all the attention, the recovery process elsewhere has suffered.

"The government is preoccupied by the nuclear crisis, so they haven't been able to focus on helping the survivors," Mr Yonekura added.

Rolling blackouts

One of the fallouts of the Fukushima nuclear crisis has been the loss of power generation from the Tokyo Electric Power Company (Tepco)

That has resulted in rolling blackouts in the Tokyo region.

As the power shortage continued, there were reports that the government is likely to ask manufacturers to cut their power use by as much as 25%.

Keidanren has been highly critical of this plan, saying it was not consulted on how power saving should work.

It has in fact asked its members to come up with solutions to conserve energy.

Lending support

Image caption Keidanren has urged Japanese citizens to remove themselves from a state of mourning

While championing the cause of the business community has been at the top of the agenda for the foundation, in times of crisis it wants to play its part in the recovery process.

It has told the government that it supports a move to cancel a cut in the corporate tax.

"I don't mind if the government skips cutting the corporate tax rate," Mr Yonekura said.

Keidanren has not only taken the lead in agreeing to pay extra taxes it has also urged the Japanese citizens to be prepared to do so as well.

"We also support the government's plan to raise sales tax," Mr Yonekura said.

One of the most hotly debated issues has been whether the government should issue bonds to fund the reconstruction.

Keidanren views such a move with caution.

The government has been reluctant to do that and Mr Yonekura said he understands why.

"The country's public finances aren't in a good shape to do so," he said.

"Issuing more public debt should be its last resort," he added.

While the government grapples with the devastation caused to the economy and Japan's business community tries to get back on track, Keidanren has urged Japanese citizens to move on with their lives.

"It's been one month since the earthquake so we should remove ourselves from a state of mourning and get together to help rebuild the Tohoku area," Mr Yonekura said.